Author: The MarketClub Team

2 Oil and Gas Stocks for the Long Term

Posted on by The MarketClub Team

With fast and furious rate hikes yet to succeed in bringing inflation under control, the stock market is expected to witness further volatility. However, the energy sector remains well-positioned to thrive with tight supply and rising global demand pushing oil prices higher.

While OPEC+’s decision to cut oil production by 2 million barrels/day and limited availability of Russian oil will keep supply tight, OPEC expects global oil demand to increase to 103 million barrels per day (BPD) next year.

When do you think the global oil demand will peak?

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Besides being the relatively cleaner alternative among fossil fuels, the natural gas liquid market is set to grow at 5.7% CAGR to reach $29 billion by 2030. Hence, it would be opportune to capitalize on the industry tailwinds and load up on oil and gas stocks Diamondback Energy, Inc (FANG) and Baker Hughes Company (BKR) as some technical indicators point to solid upsides.

Diamondback Energy, Inc (FANG)

FANG is an independent oil and gas company with a market capitalization of $34.89 billion. The company is involved in acquiring, developing, exploring, and exploiting unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It operates through two segments: the upstream segment and the midstream operations segment.

Over the last three years, FANG’s revenue grew at a 44% CAGR, while its EBITDA grew at 41.7% CAGR. Over the same time horizon, the company’s net income grew at a 67.2% CAGR.

During the third quarter of the fiscal year 2022, ended September 30, FANG’s total revenues increased 27.6% year-over-year to $2.44 billion. During the same period, the company’s income from operations increased 38.7% year-over-year to $1.61 billion, while its adjusted EBITDA increased 68.2% year-over-year to $1.91 billion.

FANG’s adjusted net income for the quarter came in at $1.14 billion or $6.48 per share. Due to high cash margins, and best-in-class well costs, the company generated nearly $1.2 billion in free cash flow, of which it returned around 75% to shareholders through share repurchases and dividend payouts. Continue reading "2 Oil and Gas Stocks for the Long Term" →

One Stock to Get Excited About Again

Posted on by The MarketClub Team

After two quarters of subscriber declines and slowing growth, streaming major Netflix, Inc. (NFLX) bounced back in some fashion as it added more subscribers than analysts estimated in the third quarter. NFLX reported a net gain of 2.41 million subscribers, which was considerably higher than the average 1.1 million additions expected by analysts.

Amid rising competition from other streaming platforms, NFLX reported a subscribers decline of roughly 200,000 in the first quarter and 970,000 in the second quarter, leading its shares to nosedive.

The higher-than-expected subscriber addition in the third quarter surprised the market. NFLX shares jumped after the company’s results were announced on October 18, 2022.

NFLX Chart

Source: MarketClub

NFLX has had a torrid time this year, with its stock declining 55.3% in price year-to-date to close the last trading session at $269.06. However, its shares have gained 12.6% over the past month.

The company comfortably beat Wall Street revenue and earnings estimates in the last reported quarter. Its revenue and EPS beat the estimates by 1.1% and 43.1%, respectively.

After a poor first half where The Walt Disney Company (DIS) overtook NFLX as the market leader, the company took up massive changes, such as introducing ad-supported streaming and cracking down on shared accounts. The company is also considering a cloud-gaming service.

In its letter to its shareholders, the company said that it expects 4.5 million new subscribers in the fourth quarter and expects its revenue to grow to $7.78 billion. Its subscriber guidance is higher than analysts’ estimates of 4 million. Continue reading "One Stock to Get Excited About Again" →

3 Energy Stocks That Could Benefit This Fall

Posted on by The MarketClub Team

President Biden seeks to add enough supply to prevent near-term oil price spikes by releasing U.S. strategic petroleum reserves (SPR) of 15 million barrels. However, that might be offset by OPEC+’s two million barrels per day (bpd) output cuts.

Oil prices have seen significant volatility this year thanks to the Russia-Ukraine war. However, strong demand is expected to keep the energy market afloat. OPEC+ expects medium-term and long-term growth in energy demand.

According to the latest U.S. energy information administration’s (EIA) short-term energy outlook report, oil prices could get a boost from potential petroleum supply disruptions and slower-than-expected crude oil production growth.

WTI Spot Price

Source: www.eia.gov

On top of it, Goldman Sachs’ head of commodities research Jeff Currie said that crude oil prices could . In addition, he said supply could get squeezed by several factors, like a stop on SPR releases, lack of drilling, and a European Union ban on Russian oil.

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Given this backdrop, investing in ConocoPhillips (COP), Hess Corporation (HES), and Northern Oil and Gas, Inc. (NOG) might be prudent in light of several technical indicators. Continue reading "3 Energy Stocks That Could Benefit This Fall" →

Don't Fall Victim to These 2 EV Stocks

Posted on by The MarketClub Team

With increasing climate change concerns, rising costs of fossil fuels due to geo-political turbulence and ever-depleting supplies, and growing inclination toward lower operational and maintenance costs, the global automotive industry is fast transitioning toward e-mobility.

Including electric vehicles, charging networks, infrastructure, and energy storage, the global electric mobility ecosystem is projected to grow at 23.7% CAGR between 2022 and 2029. The following chart illustrates the key milestones in the impressive growth trajectory of electric vehicles.

EV Sales Milestones

Source: wri.org

While high input and borrowing costs amid record-high inflation and an increasing interest rate environment impeding the EV industry’s growth, EVs are expected to keep replacing Internal combustion engine vehicles at an increasing rate each year.

How soon do you expect 25% of vehicles on the road to be electric?

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However, since the EV industry is expected to bear the brunt of the macroeconomic headwinds in the near term, investors are advised to exercise caution and not to bottom fish NIO Inc. (NIO) and Blink Charging Co. (BLNK), as some technical indicators point to further downside in these stocks. Continue reading "Don't Fall Victim to These 2 EV Stocks" →

One Stock You Could Buy and Hold Forever

Posted on by The MarketClub Team

Healthcare is one of the few sectors that enjoy inelastic demand and can easily pass on an increase in cost to consumers. Therefore, healthcare stocks are attracting investor attention amid the current economic uncertainties.

However, the persistently high inflation is raising healthcare expenditures, and many Americans still remain uninsured or inadequately covered. This could drive the demand for health insurance.

Insurance Coverage Status

Source: www.commonwealthfund.org

The U.S. health insurance market is expected to grow at a CAGR of roughly 10.1% to $846.34 billion by 2027.

Do you think the Fed’s control over inflation can ease healthcare affordability challenges?

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Given the sector’s resilience and long-term growth prospects, one could consider investing in shares of health and well-being company Humana Inc. (HUM), given its potential to deliver solid returns. Continue reading "One Stock You Could Buy and Hold Forever" →